Answer to Question #131558 in Macroeconomics for Virginia

Question

Which one of the following statements regarding fiscal policy and the budget is
correct?
(2)
(a) When the government plans to stimulate economic activity, it can increase
spending or reduce taxes;
(b) Revenue from tax is always greater than government spending in South
Africa;
(c) Demand management only refers to fiscal policy;
(d) A contractionary fiscal policy should be implemented to combat
unemployment.

Answer 1

(a) When the government plans to stimulate economic activity, it can increase

spending or reduce taxes;